Market participants expect regulators to curb high-risk leveraged ETFs,
including possible hikes to minimum margin requirements, after South Korea's Lee
said the domestic stock market needs time to stabilise following an
unprecedented rapid rally and urged swift action on the issue. Lee told senior
officials in Seoul the market is "quite unstable" after a historic surge and
will require time and some volatility to settle. He acknowledged controversy
around leveraged ETFs and asked the Financial Supervisory Service (FSS) and
Korea Exchange (KRX) to address the matter and set follow-up measures. The main
opposition People Power Party criticised the government for pushing ambitious
market targets while neglecting accumulating leverage risk, saying that
encouraged excessive risk-taking.
